budget Sometimes people spend too much and it becomes hard for them to manage their money and their loans for bad credit. People that are bad at budgeting their income will often end up building a debt; which can be annoying to pay off in the long run. One of the easiest ways to avoid or battle debt can be to create and manage a budget; that way you can see how much you income are making and spending each month. In order to successfully manage a budget follow these three basic steps.

First figure out what are your financial goals both immediate and long term. Immediate financial goals may be paying your rent, utilities, car insurance, gas, food and cell phone bills. Examples of long term goals may be saving up for retirement, investments, or charitable donations. It is also important to prioritize and figure out which goals may be necessities and luxuries. You might have to cancel that family vacation you were planning on going this year in order to be able to afford your everyday living expenses and make plans for the future.

Second calculate how much money you are making and how much money you are spending. Add up all your sources of income salary after taxes, child support payments, veteran’s compensation etc.
The total amount will be your monthly income. Your expenses can be separated into three different categories; fixed committed expenses, variable expenses, and discretionary expenses.
Fixed committed expenses are bills that you have to pay each and every month at a fixed rate your rent or mortgage can be a good example. Variable committed expenses are things you may need to buy every month but the amount you purchase will vary based on need. groceries or gas are examples of variable expenses. Discretionary expenses are optional expenses for recreation and entertainment such as your gym membership.

moneyThird balance your check book, here are the basics. Keep records of all your deposits and purchases. Print out your bank statements every month. Do your own math to make sure your bank hasn’t missed any transactions. Read carefully line by line to make sure your record of checks is the same as the statement.
Make sure you weren’t charged any additional fees that you weren’t supposed to. Seeing this error may make you want to call your bank and see if these fees can be removed.

Monitor your budget and make any adjustments you may need to. Committment is the key to success and will help you reach your financial goals.